Smart Auto Insurance Blog

Many of the reasons for auto insurance rate increases over the past decade are beyond our control.  According to Moneywise’s “Why are your car insurance premiums rising?,” auto insurance rates have doubled in past decade.  There is a lot of talk about the rising gas prices eating into household incomes.  Not as much talk is made about rising auto insurance prices, but that may be because a lot of people just continue to pay their bill monthly without even keeping close track of price increases.

The cost of auto insurance went up 15% last year in the UK, and increased 110% over the past ten years.  This article states that the top reason for auto insurance rate increases is a dramatic increase in personal injury claims.  In the past, the majority of car insurance claims were paid out for repairs.  But half of claims are now paid out for injuries and medical issues related to car accidents.  Between 2010 and 2011, there was an 18% increase in medical claims like whiplash.  That is the largest increase they have ever seen in the UK.  Research has shown a link between the number of no win, no fee lawyers specializing in car accident claims and the amount of claims filed in a certain location.  There could be new legislation soon regarding the way that some claims lawyers do business.

Another reason for increasing auto insurance rates is an increasing cost to repair vehicles.  New technology is great for car owners, but it really increases the cost to fix the vehicles when there is damage.  One example is that of a broken headlight that used to need a new light bulb and maybe some glass if that cover were broken as well.  Now an entire sealed panel may have to be replaced just because of a broken headlight cover.

Some organizations believe that auto insurance companies are to blame for rising premiums because competition with other insurers is causing them to get more expensive repairs and rental cars when their insured was not at fault in an accident.  Rates have been going down this year slightly because of heavy competition in the auto insurance market.  It’s difficult when things beyond your control are setting your auto insurance rates, but the best you can do is keep the factors that are under your control in your favor to get lower auto insurance rates.

Progressive Auto Insurance has been in a bit of a firestorm lately after a battle with the family of an individual who previously held their auto insurance.  Matt Fisher’s sister died in a 2010 car accident.  She held a policy for $100,000 in case she were injured or killed in a car accident and the other driver did not have adequate auto accident insurance.  In the case of her death, the other driver had a $25,000 policy, significantly less than the $100,000 held by Fisher’s sister.  Last week, Matt Fisher was on CBS This Morning talking about the battle that his family has had with Progressive since the 2010 car crash that took his sister’s life.

Since eyewitness accounts did not make it 100% clear who was at fault in the accident, the claim had to go to trial.  Fisher’s family sued the other driver so that they could establish fault in the accident.  The Fisher family believes that Progressive defended the other driver in court so that they could avoid paying out his sister’s policy. But Progressive says that their defense in court was for their own company and that the other car’s driver was defended by Nationwide, that driver’s insurance company.  Matt Fisher’s Tumblr blog, “My Sister Paid Progressive Insurance to Defend Her Killer In Court,” has garnered a huge amount of attention recently.  He has been discussed on nearly all of the major news programs and Progressive has been inundated with criticism from those who’ve taken to defending Fisher’s story.

According to Alex Alvarez of MediaITE in the article, “Matt Fisher describes how Progressive Insurance defended his sister’s killer,” the Fisher family won their lawsuit showing that the other driver was at fault.  The courts awarded the Fisher’s with $760,000 in damages.  Progressive Insurance has expressed their sympathies to the Fisher family and plans to settle this matter with them as soon as legally possible.  Matt Fisher’s blog and Twitter presence certainly made this story well know across the United States.  This has been quite a negative story for Progressive Insurance and may have hurt their reputation.  Social media has a strong power over opinions, whether related to auto insurance companies or politics.

Aviva auto insurance in the UK is using technology to help its customers lower their auto insurance rates.  This technology is similar to that being used by Progressive and other car insurance companies in the US who are monitoring driving habits, but with one big difference.  Aviva is monitoring customers’ driving habits through their Android smart phones.  The company has already been testing this new process on their employees, but is looking for 5,000 volunteers to help in the testing process.  This information comes from The Guardian’s “Aviva to trial smartphone car insurance technology,” by Hilary Osborne.

In the past, Aviva auto insurance used black box technology to monitor driving habits.  Black boxes are installed in vehicles to track driving habits like braking, following, and speeding.  Drivers who demonstrate safe driving habits are eligible for a discount on their auto insurance premiums.  This new technology allows monitoring to occur straight from a driver’s smartphone, making it much simpler to begin the program.  Research has shown that this telematics technology not only helps customers reduce their car insurance premiums, it really makes for safer drivers overall.

Your first 200 miles of driving will be monitored after downloading Aviva’s RateMyDrive application.  Once your driving habits are monitored, you are assigned a score that will determine your auto insurance premium.  One stipulation is that it won’t really help you if your rates are low to begin with.  Drivers labeled safe can receive a 20% discount on their premiums, 10% if they are already paying a rate predetermined as low.  But those with the lowest premiums already will not receive an additional discount.  If for some reason your driving is not deemed safe after you have been monitored, you will maintain a standard Aviva car insurance premium.  Look for more US companies to use smart phone technology to monitor driving habits soon.

Check out our updated blog from May.  Florida’s auto insurance laws changed in July and many individuals and consumer groups are not happy.

http://www.smartautoinsurance.com/blog/2012/05/make-pip-auto-insurance-claims-right-away/